Weekly Law Resume - June 30, 2011: Bad Faith - Private Right of Action Permitted for Violation of Insurance Code Provision


Chris Hughes v. Progressive Direct Insurance Company Court of Appeal, Second District (June 15, 2011)

Insurance Code Section 758.5 prohibits an insurer from either requiring that an insured's automobile be repaired by a specific automobile repair dealer or suggesting or recommending that a specific repair dealer be used unless the insured is first informed in writing of his or her right to go elsewhere. This case considers whether violation of this section would support a claim for violation of Unfair Competition Laws under Business and Professions Code Section 17200. Chris Hughes was involved in an automobile accident on August 15, 2005. He was insured by Progressive Direct Insurance Company, and he made a claim for repair to his vehicle. Hughes informed Progressive Direct of his desire to take the car to a particular shop, which he understood was not part of Progressive's "Direct Repair Program." Progressive responded by telling Hughes that he should take his vehicle to Champion Collision and Paint, which was a DRP facility. He was further told that his claim would be approved and the repairs would be performed more quickly. Progressive did not inform Hughes that he had a right to take his car to the shop of his preference. Hughes took the car to Champion, but was ultimately dissatisfied with their work.

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